Vodafone said a combination would provide “the scale needed to be able to accelerate the rollout of full 5G in the UK”, which was partly hampered by Britain banning Chinese giant Huawei from s involved in technology offering faster downloads than 4G.
Vodafone said it would hold a majority stake of 51% and CK Hutchison the rest under a cashless deal.
A merger would “extend broadband connectivity to rural communities and small businesses” in the UK, the statement said.
“The UK government rightly sees 5G as transformative for the economy and society and essential for the UK to become more competitive in an increasingly digital world,” he added.
Vodafone’s share price rose around 3% in late trading on London’s FTSE 100 index, which rose only marginally.
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, noted the possibility of “significant regulatory hurdles ahead for the deal, as authorities assess the potential handover of ownership of more critical UK infrastructure to a foreign owner”.
“Clearly there is still much to agree and it is far from certain that this is a done deal, but if signed the joint venture with Three UK would create the biggest player in the UK mobile industry” , she added.